The Ontario Securities Commission (OSC) and the Canadian Investment Regulatory Organization (CIRO) published a joint report on sales culture concerns at five of Canada’s largest bank-affiliated mutual fund dealers, based on a voluntary survey of mutual fund dealing representatives. The findings point to potential client harm linked to sales pressure and incentives, including instances where recommendations and disclosures may not align with clients’ interests. Nearly 3,000 representatives responded to the survey, which examined the sales environment, sales pressure, product range, and representatives’ knowledge. While many respondents viewed their product range as satisfactory, one in four reported that clients have been recommended products or services not in their interests at least “sometimes”, 40% believed performance scorecards influence product and service recommendations, and one in three reported clients being given incorrect information about products and services being recommended. OSC and CIRO identified the sales environment, compensation, incentivization, and performance tracking as potential contributing factors. The next phase will focus on understanding the sales practices in place and the controls dealers use to address any material conflicts of interest arising from those practices.
Canadian Investment Regulatory Organization 2025-07-09
Ontario Securities Commission and Canadian Investment Regulatory Organization report flags sales culture concerns at five major bank-affiliated dealers
The Ontario Securities Commission and the Canadian Investment Regulatory Organization released a report on sales culture concerns at major bank-affiliated mutual fund dealers in Canada. Based on a survey of nearly 3,000 mutual fund dealing representatives, it indicates potential client harm from sales pressure and incentives, including misaligned recommendations and incorrect product information. The next phase will examine sales practices and controls to address conflicts of interest.